Background Ataxia telangiectasia mutated (ATM) regulates DNA repair and cell cycle. The present study analyzed arecoline‐induced ATM expression during oral cancer progression. Methods In vitro studies were performed using oral squamous cell carcinoma (OSCC) cell lines treated with arecoline to analyze cell response and ATM regulation. in vivo studies were performed using immunohistochemistry to detect ATM expression in normal, oral potentially malignant disorder (OPMD), and OSCC tissues. Results Low‐dose arecoline induced cell proliferation, ATM promoter activity, and DNA repair. High‐dose arecoline induced cell cycle arrest, apoptosis, and DNA damage. ATM was overexpressed in OPMD tissues but was downregulated in OSCC tissues. ATM expression level was associated with the risk of developing dysplasia, buccal‐OSCC, and with OSCC survival rate. Conclusion High ATM expression helps DNA repair mechanisms to maintain the cells in the OPMD stage, but low ATM expression causes DNA damage accumulation to increase cell malignancy.